Judgment in Managerial Decision Making / Edition 8

by Max H. Bazerman

Overview

When faced with a decision, we all believe we're weighing the facts objectively and making rational, thoughtful decisions. In fact, science tells us that in situations requiring careful judgment, every individual is influenced by his or her own biases to some extent. Drawing on the very latest behavioral decision research, Judgment in Managerial Decision Making, Seventh Edition examines judgment in a variety of managerial contexts and provides important insights that can help you make better managerial decisions.

Widely recognized by practitioners and academics in fields ranging from behavioral finance to public policy, psychology, and economics, this Seventh Edition of the classic text: Discusses the motivational and emotional influences that affect decision making, Delves into the fairness and ethics involved in the decision-making process, Integrates numerous hands-on decision exercises and examples that will help readers enhance the quality of their managerial judgment, Provides tips and techniques on how to make rational decisions during negotiations, Presents seven critical strategies for improving decision making.

For psychologists, the book outlines a systematic framework for using psychological findings to improve judgment. For the economist, the book suggests a critique of the classic economic model of decision making. Most of all, however, for every manager or financial decision maker, this book offers a clear path to better decisions.

About the Author:
Max H. Bazerman is the Jesse Isidor Straus Professor of Business Administration at the Harvard Business School. In addition, Max is also formally affiliated with the Kennedy School of Government, thePsychology Department, and the Program on Negotiation at Harvard. He is the author or co-author of over 150 research articles and chapters, and the author of numerous other books

About the Author:
Don Moore is an Associate Professor of Organizational Behavior at Carnegie Mellon University's Tepper School of Business, and holder of the Carnegie Bosch Faculty Development chair. Don is also formally affiliated with CMU's Department of Social and Decision Sciences, and he is the founding director of the Center for Behavioral Decision Research

Product Details

ISBN-13:	2901118065708
Publication date:	10/16/2012
Pages:	288
Product dimensions:	6.50(w) x 1.50(h) x 9.50(d)

About the Author

Max H. Bazerman is the Jesse Isidor Straus Professor of Business Administration at the Harvard Business School. In addition, Max is also formally affiliated with the Kennedy School of Government, the Psychology Department, and the Program on Negotiation at Harvard. He is the author or co-author of over 150 research articles and chapters, and the author of numerous other books. Professor Bazerman was named one of the top 30 authors, speakers, and teachers of management by Executive Excellence in each of their two most recent rankings.

Don Moore is an Associate Professor of Organizational Behavior at Carnegie Mellon University's Tepper School of Business, and holder of the Carnegie Bosch Faculty Development chair. Don is also formally affiliated with CMU's Department of Social and Decision Sciences, and he is the founding director of the Center for Behavioral Decision Research. He received his Ph.D. in Organization Behavior from Northwestern University.

Table of Contents

Introduction to Managerial Decision Making     1
The Anatomy of Decisions     1
System 1 and System 2 Thinking     3
The Bounds of Human Rationality     4
Introduction to Judgmental Heuristics     6
An Outline of Things to Come     10
Common Biases     13
Biases Emanating from the Availability Heuristic     18
Biases Emanating from the Representativeness Heuristic     21
Biases Emanating from the Confirmation Heuristic     28
Integration and Commentary     40
Bounded Awareness     42
Inattentional Blindness     46
Change Blindness     47
Focalism and the Focusing Illusion     48
Bounded Awareness in Groups     50
Bounded Awareness in Strategic Settings     51
Bounded Awareness in Auctions     59
Discussion     61
Framing and the Reversal of Preferences     62
Framing and the Irrationality of the Sum of Our Choices     65
We Like Certainty, Even Pseudocertainty     67
The Framing and the Overselling of Insurance     70
What's It Worth to You?     71
The Value We Place on What We Own     72
MentalAccounting     74
Do No Harm, the Omission Bias, and the Status Quo     76
Rebate/Bonus Framing     78
Joint Versus Separate Preference Reversals     79
Conclusion and Integration     82
Motivational and Emotional Influences on Decision Making     84
When Emotion and Cognition Collide     84
Positive Illusions     90
Self-Serving Reasoning     94
Emotional Influences on Decision Making     96
Summary     99
The Escalation of Commitment     101
The Unilateral Escalation Paradigm     103
The Competitive Escalation Paradigm     105
Why Does Escalation Occur?     108
Integration     112
Fairness and Ethics in Decision Making     113
Perceptions of Fairness     113
Bounded Ethicality     122
Conclusion     134
Common Investment Mistakes     136
The Psychology of Poor Investment Decisions     138
Active Trading     145
Action Steps     147
Making Rational Decisions in Negotiations     151
A Decision-Analytic Approach to Negotiations     152
Claiming Value in Negotiation      155
Creating Value in Negotiation     156
The Tools of Value Creation     161
Summary and Critique     166
Negotiator Cognition     168
The Mythical Fixed Pie of Negotiation     168
The Framing of Negotiator Judgment     169
Escalation of Conflict     171
Overestimating Your Value in Negotiation     172
Self-Serving Biases in Negotiation     174
Anchoring in Negotiations     176
Conclusions     178
Improving Decision Making     179
Use Decision-Analysis Tools     181
Acquire Expertise     186
Debias Your Judgment     189
Reason Analogically     191
Take an Outsider's View     193
Understand Biases in Others     195
Conclusion     198
References     200
Index     223

Editorial Reviews

Provides training in decision making by creating awareness of the decision-making process and by offering strategies for improving these processes. For use in undergraduate economics, psychology, and organizational behavior courses. This fourth edition provides more contemporary examples of real-world decisions, a new chapter on motivational biases, and expanded material on decision-making from individual and multi-party perspectives. Annotation c. by Book News, Inc., Portland, Or.

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